Brand management

case report

By KANCHAN GUNDAL

BRAND: DIOR

PROFESSOR: Dildar Hussain

Luxury marketing and brand management

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Table of content

1 Introduction 3

2 Company background 4

3 The problem faced 6

4 Contextualizing the issue 10

5 Key questions 11

6 Analysis and solutions

7 Solution and Recommendation 14

8 Conclusions 15

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 Introduction

Brand management is a process of planning, developing, and maintaining a strong

and positive image in the minds of consumers and stakeholders. It encompasses the
range of activists, strategies, and campaigns aiming to establish the brand's
reputation, brand image and brand equity. The main objective of brand
management is to perceive that the brand is differentiate from its competitor and to
build a long-lasting relationship with their consumer. Brands wield significant
influence over customer engagement, market competition, and overall company
management. A robust master brand presence sets a company's products apart from
competitors, fostering brand loyalty towards the company's offerings.

In this report, we are going to analyze luxury brand Christian Dior commonly
known as Dior is French multinational fashion house under LVMH controlled and
chaired by French businessperson Bernard Arnault. The company was founded in
1946 by French fashion designer Christian Dior. Haute couture is under the
Christian Dior Couture division. Delphine Arnault has been the CEO of Christian
Dior Couture since 2023.
Dior is associated with sophistication, elegance, and timeless beauty. Christian
Dior originally aim to create a brand that symbolized the post-war revival of hope
and positivity. This idea was brought to life through the iconic “New look” - a
design characterized by a slim waist, full skirt, and strong femininity.

The new look was not a fashion statement; it symbolized a new era, a new way of
living. Dior's primary marketing approach revolves around creating a lavish and
captivating brand encounter. The brand's attention to detail is evident in every
element, ranging from their flagship stores to the packaging, which exudes a sense
of opulence. Stepping into a Dior boutique instantly transports individuals into a
realm of sophistication and refinement. These stores are meticulously crafted to

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display the brand's rich history and contemporary essence, ensuring that customers
have an unforgettable and remarkable shopping experience.
Even though Dior is a big luxury fashion brand, it still faces challenges and
problems. In 2023, they had an advertisement controversy in China where they
faced backlash and criticism from consumers. Dior was accused of racism on
Chinese social media over an advertisement showing an Asian model pulling up
the corner of her eye. The French label posted the picture on its Instagram account,
before swiftly taking it down. Dior has not made any public comment. In this
report present a detailed report about the controversy, the campaign, the negative
marketing, the misinterpretation of the campaign, researcher gap of cultural
sensitivity, Chinese luxury market; the later impact on the Chinese consumer.

Company background

History

Christian Dior, an emblem of sophistication and innovation, left an enduring

legacy in the realm of haute couture. His life's journey and impact on fashion
continue to resonate, shaping the industry's landscape even today.
Christian Dior: Early Life and Formative Years

Born on January 21, 1905, in Granville, France, Christian Dior grew up in an

environment steeped in artistic inspiration. His family's background in the fertilizer
business initially shaped his career expectations, but his passion for art and design
steered him in a different direction.
From a youthful age, Dior exhibited a penchant for sketching and design, and his
artistic inclinations led him to pursue studies in political science. However, his
burgeoning interest in fashion propelled him toward a different career trajectory. In
the 1930s, Dior commenced his professional journey by selling fashion sketches to
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various couture houses. His talent quickly garnered attention, and he secured
positions working alongside established designers, honing his craft, and absorbing
the intricacies of haute couture.

The iconic fashion house known as Dior was established on December 16, 1946, at
30 Avenue Montaigne in Paris. However, the current Dior corporation recognizes
1947 as its official opening year. The financial support for Dior came from the
wealthy businessperson Marcel Boussac. Initially, Boussac had invited Dior to
design for Philippe et Gaston, but Dior declined the offer, opting instead to start
fresh with his own name and brand. This new couture house became part of
Boussac's vertically integrated textile business, which already had a significant
presence in the industry. With a capital of FFr 6 million and a workforce of 80
employees, the company was primarily a passion project for Boussac and served as
a majorly owned affiliate of Boussac Saint-Freres S.A. Despite Boussac's
reputation as a "control freak," Dior was granted an unusually large degree of
control over his eponymous label, including legal leadership, a non-controlling
stake in the firm, and one-third of pretax profits. Dior's exceptional creativity also
earned him a generous salary.
Christian Dior’s most precious heritage, savoir-faire inspired by excellence, is
celebrated in every creation crafted by the House, from haute couture to ready-to-
wear, from jewelry to home accessories. Exceptional craftsmanship embodies the
alchemy between the preservation of time-honored technique and perpetual
innovation. “Our Maison reinvents the inestimable heritage and savoir-faire
inspired by Monsieur Dior, a dream that embodies Parisian haute couture.
We share this dream with our customers around the world through our values of
excellence, innovation, and bold creativity.” said by the CEO.
As of March 2024, Dior has a market cap of $151.64 Billion. This makes Dior the
world's 88th most valuable company by market cap according to our data. Market
capitalization, commonly called market cap, is the total market value of a publicly
traded company's outstanding shares and is commonly used to measure how much
a company is worth. Dior's prominent position in the luxury sector is well-
established. The dominance in the market and their strategic initiatives towards the
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crucial Chinese market; Dior is renowned as a key player in the fashion and luxury
realm, celebrated for its superior quality, innovative creations, and rich legacy.
Being part of the Louis Vuitton conglomerate, Dior benefits from robust brand
management and resources. China stands as the largest luxury market globally,
contributing significantly (approximately 40%) to worldwide sales. This
underscores China's pivotal role in Dior's ongoing expansion. Dior acknowledges
China's importance and has actively pursued this market for years, establishing
itself as one of the early luxury brands to venture into China in the 1980s
[ResearchGate]. Localization as Priority: Dior has tailored its strategies to resonate
with Chinese clientele. This involves leveraging digital platforms like WeChat for
marketing and live streaming, as well as infusing cultural elements into product
offerings. While Dior caters to a sophisticated Chinese customer base valuing
tradition, artistry, and exclusivity, the brand is also likely adjusting its marketing to
appeal to millennials and Gen Z consumers who seek digital interactions and social
media engagement.

The problem faced

Dior was attempting to advertise its Dior beauty Mitzah collection in the Instagram
post. The collection was created by peter Phillips makeup and the post was meant
to have its model show off the looks. In its caption, Dior talked about the
sensuality of the leopard motif that is ‘perpetually’ associated with Mizza Bricard,
Monsieur Dior's enigmatic muse. Dior added that the look was conveyed through
smoldering colors and accented with accessories. The post quickly taken down
after users began pointing out that the model’s pose was a racist gesture. Dior,
however, did not address their concerns publicly.

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The post feature as Asian model who was seen puling her eye up to highlight her
makeup. Dior, the renowned French fashion house, they removed a post from its
Instagram page following accusations of racism. This action was interpreted as
imitating the offensive ‘slanted eye’ gesture often used to demean Asians.
the post, the image went viral on Chinese social media. On Weibo, the hashtag
“Dior makeup advertisement suspected of discriminating against Asians” has
amassed over 37.132 million views as of April 17, 2023.
Given the huge wave of online backlash, Dior quickly removed the image from its
carousel post on Instagram. However, the backlash continued to mount as many
netizens continued to comment on the original post, expressing their anger and
disappointment. While some netizens have defended the action, stating that it is a
normal display technique to highlight eye makeup, most believe that the gesture
was intentional.

Angry comments have also flooded the label's Instagram account. "It's racial
discrimination," a top-liked comment read.
"Are you trying to make money and play racism at the same time?" a Chinese user
posted.

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State-owned newspaper Global Times published an editorial calling on the brand to
apologies.
"'Pulling your eyes back'... makes fun of the appearance of Asians, especially East
Asians," it said. "We hope that Dior can face up to its mistakes, make a sincere
apology and response to Asian society, and make clear statements on how to
prevent similar problems from happening in the future."
Some netizens have also called on Chinese celebrities who model for Dior to end
their association with the brand.
But there are also some who think the discussion is over the top.

"An extremely unconfident person won't be able to take any level of humour," one
Weibo user wrote.
"Those who buy Dior never think it insults China, it's always those who don't buy
that are concerned by it," another one said.
This is not the first time Dior has been caught up in controversy in China, one of
its biggest markets.
A Chinese fashion photographer's picture for the brand sparked outrage in 2021
after some netizens said it perpetuated Western stereotypes of Asian faces. The
photographer later apologized, and Dior said it "respects the sentiments of the
Chinese people".
Online consumer straight up wants to boycott accusing brands of disrespecting
Chinese people. From Dior, Mercedes- Benz and Gucci to made in China
companies, international and domestic brands have gotten reprimanded on the
subject by nationalist consumers over recent years.
In 2022, Dior was accused of "culturally appropriating" a Chinese traditional
design for one of its skirts.
A Chinese snack brand was also previously accused of racism for using a model
with narrow eyes in its advertisements. Chinese consumers are aware of racial
representation issues on global stage, and they are demanding greater cultural
awareness about how they appear to the world.

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Western stereotypes
The concept of beauty varies in diverse cultures and countries. In China, there is a
growing tension between stereotype of Chinese beauty and the country’s own
evolving beauty standards.
As in this report, we see how Dior has feature Chinese model with narrow eyes in
the advertisement which sparked controversy. After this advertisement, many
Chinese consumer question why these ads do not display women with fair skin and
large, round eyes- feature typically associated with beauty in western media. This
has led accusation about how western beauty standards and taste dominant the
advertisement portrait narrow depiction of Asian women.
However, the issues are not about been black or white, frustration with
stereotypical portrayal is understandable, some argue over the backlash overlooks
the diversity of Chinese beauty. Dr. Luwei rose luqiu, an expert from Hong Kong
Baptist university, warn against rejecting ‘aesthetic pluralism.’ She emphasizes
that this approach stifles the appreciation of beauty that does not conform to a
single standard.
Previously, historical evidence itself favored the narrow eyes in China. Some of
the painting like from tang dynasty (618-907 ad), considered China's golden age
for art and culture, often portrait women with this feature. Dr. Jaehee Jung, a
consumer behavior expert, point out that a preference for large, round eyes would
be recent influenced western media exposure after China opened themselves to the
world in the late 1970s.
Today, the beauty standards of western are influenced in such a way, however it is
undeniable. Dr Jung observe that many Chinese women in China are embrace
western beauty standards as portrayed in media image. This led to the trend of
using makeup and even cosmetic surgery to create “double eyelids” and achieve a
more wide-eyed look.
This debate underscores the interplay between cultural expectation and evolving
beauty standards.

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Contextualizing the Issue

With the rapid expansion of international trade and digitalization of the world,
businesses are no longer bound to geographical borders and have opened them to
the world with opportunities to expand their business, connect diverse audiences
around the world. However, this expansion comes with a critical need for cultural
sensitivity in international marketing campaigns. The businesses need to resonate
with diverse cultures require deep understanding of value, norm, and preferences
of target audience.
Cultural sensitivity in international marketing is not just a nicety; it is a strategic
imperative. Failing to acknowledge and respect cultural differences can result in
campaigns that are ineffective at best and offensive at worst. As Cultural
sensitivity was seen in the Dior post, the way the consumer reacted to the
advertisement requires challenges and avoiding stereotypes to have a good
reputation. After this confounded, Dior treated an entire culture as a monolithic
entity that could be reductive and lead to mispresentation. The foundation of
cultural sensitivity lies in understanding and respecting the unique aspects of each
culture. This just not involve translating content into different languages; it
requires an in-depth exploration of cultural dimensions that shape behaviors,
beliefs, and preference.
Dior must take care of Chinese market, the consumer are driving force in the
global luxury market, their influence is undeniable. China itself boost world's
largest luxury consumer base; they account for 21% of global spending on luxury
goods. Chinese consumers are influencing luxury trends. They prioritize timeless
design and craftsmanship; they desire self- expression through luxury purchase.
Chinese consumers are bound to shop around China led many Chinese consumer
restriction to shop domestically. This is an equal challenge and opportunity for
luxury brands seeking to cater in a crucial market. Overall, Chinese consumer are
no longer just a large segment; they are the cornerstone of the global luxury

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market. The brands must prioritize Chinese market before launching a global
campaign. Dior needs to adapt and cater to this influential group.

Key question

1. How did Dior marketing team fail to consider

cultural sensitivity in this campaign?
2. In their past, Dior has been already accused for been
racists are they neglecting the culture factor in their
campaigns?
3. What are the potential consequences of the
controversy on the image of the brand
4. What steps did Dior take to build a good reputation
after this controversy?

Analysis of problem

The controversy of eye pulling showcase the perspective of the western media
looking towards Chinese women beauty. Here are the Several marketing theories
can be applied to analysis the misstep by Dior’s marketing team.
1. Semiotic: This theory focuses on how signs and symbols are used to
communicate meaning. In Dior case, the advertisement demonstrates a
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 Chinese model slant her eyes with her hand to focus on the eye
makeup. In this, ad could be interpreted as perpetuating racist
stereotype by using a specific cultural symbol (hand gesture) to
picture Chinese women in a negative way. Dior might not have
intended this meaning, but it is important for the marketing team to
make an analysis of how it could be perceived by the different
audience, especially in China.

2. Cultural sensitivity: marketing campaigns here look insensitive

towards the cultural nuances of the target audience. In the Dior ad
might have been culturally insensitive as the hand gesture might hold
different meanings in various cultures. This lack of sensitivity can lead
to offense.

3. Social media; social media holds a powerful role of building

reputation or spoiling it and controversy online amplify very quickly.
One the ads posted online, and we get backlash on it, the brand
should take down the post immediately down which Dior did but did
not give an official statement or apology to the consumers. This rapid
spread of hate can damage Dior's brand image.

4. Crisis management: When a marketing team misstep occurs, it is

crucial to have a crisis management plan in place. Dior’s should
response to the controversy and manage the situation before it
creates major damage to the brand’s reputation, which is a key factor
in determining the long-term impact on their brand. A quick and
sincere apology acknowledgment to the offence can help mitigate the
damage made.

This is the marketing theory Dior should have considered before launching
new campaigns in future.
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To explain the marketing misstep in China, highlighting the importance of
cultural sensitivity in the marketing mix in an easier way, here is how:
Product: The ad featuring the eye pull gesture, clashed with Chinese
cultural sensibilities. Dior might have overlooked the gesture, causing a
negative connotation in that market.
Price: the advertisement cost brand value of Dior, negative publicity could
damage Dior's brand image in China, impacting their pricing power and
future sales.
Promotion: Dior published ad Chinese social media and on Instagram. A
platform (Instagram) potentially less popular in China, suggests a
promotional strategy not tailored to the target audience. Additionally, failing
to consider cultural nuances during content creation led to a damaging
campaign.
Placement: promoting the ad globally without cultural adaptation illustrates a
communication breakdown with Dior. Local marketing teams, if consulted, could
have flagged the cultural inappropriateness.
The incident highlights a disconnect between Dior's worldwide marketing
approach and the unique requirements of the Chinese market. Dior encountered a
negative response by overlooking cultural aspects in their marketing mix, which
could have been prevented through improved communication and cultural
awareness.
The marketing team focused on a global campaign; they were unaware about
pulling eye insensitive in China. They might have focused on the aesthetics or
message across regions, overlooking the need for adaptation. It simply shows that
they were unaware about the cultural context in China, the creative team might
have simply designed the ad on the bases of client brief or inspiration provided,
missing the potential for offense. This case also shows the insufficient od research
into Chinese cultural sensitivities, the marketing or creative team might not be
aware of the potential offense of the gesture.

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Solution and recommendation
After every controversy, there is damage done to the reputation of the brand and to
build the trust again and the brand should be careful before launching a campaign.
When a campaign gets backlash the brand should immediately take the campaign
down, control the situation by acknowledging the issue of culture offense and give
a sincere apology or statement so that it does not cause more damage to the
reputation of the brand. Dior been such a big brand, the risk management team
should work hand in hand; though in this case Dior did not do but they took down
the post. It was not the first time that Dior was accused of been racist, the
marketing team should be trained on the understanding of cultural sensitivity
before simple designing any campaign of advertisement. When a campaign is
backlash, they should analyze the issues what has caused the problem, read the
comment of the consumer. To repair the reputation Dior should take initiative by
collaborating with Chinese experts for future campaigns especially for Chinese or
Asian market; they itself bring more share to Dior. One of major recommendation
would be partnering with Chinese celebrities or influencers to rebuild trust to uplift
the Chinese people, which has been observed after the controversies Dior did
partnership with kpop stars and Chinese influencers. This Leds to rebuild the
image of Dior as the kpop and ai influencers were trending at that moment.

Conclusion
This case study analyzed Dior's controversial advertisement in China, which
featured an Asian model in a pose that was found racially insensitive. The
advertisement sparked outrage on social media, the consumer backlash the

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campaign and the post had to take down, highlighting the importance of cultural
insensitive in global marketing campaign.
We analyzed the situation through the gap between the cultural understanding and
global campaign and marketing mix(4ps) - product, price, promotion, placement –
strives how cultural insensitive can cause negative impact on each element. The ad
itself was offensive in the Chinese market due to historical gesture and
misrepresentation. Negative publicity damages the brand online and perceived
brand value. Dior posted the post on Instagram, platform partially restricted in
China limits Dior ability to address the issue effectively.
Implication for luxury brand in China
The Chinese market is a significant player in the luxury fashion industry. Dior's
misstep servers as a cautionary tale for brand venturing into this market.
Invest in cultural expertise: building a team with a deep understanding of Chinese
cultural or incorporating cultural consultants can help to avoid any consequence.
Global campaign: the brands create a global campaign for international trade,
should be adaptable and cater to regional sensitives. A one size fits all approach.
Prioritize research: thorough deep research into Chinese cultural norms and social
media landscapes is crucial before launching and campaign.
Communication: striving open communication between marketing, creative teams,
and potential cultural is essential to ensure no mispresentation of campaign and are
effective
Cultural sensitivity is a crucial part should be priorities, luxury brands can navigate
the complexities of the Chinese market and build stronger relationship with
Chinese consumer.

Reference

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https://www.bbc.com/news/world-asia-china-65229901

China: Dior accused of racism over 'pulled

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https://www.investopedia.com/terms/b/brand-management.asp
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https://pretavoir.co.uk/blogs/news/the-history-and-legacy-of-christian-dior
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https://thebrandhopper.com/2024/01/20/dior-history-success-factors-marketing-strategies-more/
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